In summer 2008 Goldman Sachs predicted that oil price will go up to $200. Soon after that oil price went up to $150 and then dropped to $40.00 per barrel. Now the bank forecasts $57.00 per barrel in 2016.
The bank has a forecast till 2020. According to the forecast, WTI price in 2016, 2017, 2018, 2019 and 2020 will be $57.00, $60.00, $60.00, $55.00 and $50.00, respectively.
Experts of the investment bank believe that reduction of oil prices and potential further decline will lead to activity in the sectors of merger and absorption in the coming 12 months.
The time will show is the forecast comes true, but the traders will most likely form their positions on contrast to what Goldman tells its clients.
However, hedge fund of BP Capital LLC forecasts return to $150 per barrel next year against the background of reduction of production by the US shale companies.
But the truth is somewhere in the middle , as usual. Prices going up to $65.00 per barrel will raise the question of possibility of resumption of drilling, though it will hardly bring any profit to the companies. But the prices if $75.00-80.00 will definitely trigger resumption of the shale boom.
Even is miracle happens and the US shale companies start extracting even more, any increase in production from the current level of 9.3 million barrels a day will lead to a new slump of prices.
Low prices will lead to reduction of number of drilling rigs and total costs.
This situation could totally destroy all hopes for return of the small markets to the market and it will be hard to look for investors after a couple of such cycles.
The prices could stabilize within the range of $65.00-75.00 per barrel, but the stability will hardly last long.
